Technical Analysis

Pound Steadies After Rally |

    Share on Facebook Share on Twitter

    The pound has edged lower today, after starting the week with sharp gains. In the North American session, is trading at 1.1334, down 0.18%.

    Pound Jumps After Hunt Axes Tax Cuts

    The pound continues to show strong volatility as the political saga continues in the UK. Truss finally stopped blaming the markets and “global headwinds” for the decline of the British pound and UK gilts on Monday, saying she was sorry for going too “far and too fast” with her economic plan. Truss has insisted she will continue on as leader, but the restless Conservatives, who have sunk in the polls, could decide to pull the plug on Truss’ disastrous leadership.

    Jeremy Hunt, the new finance minister, wasted no time in abolishing most of the tax cuts contained in the recent mini-budget and told parliament that spending cuts and tax increases were coming, an astounding U-turn. Hunt scaled back the plan to cap energy bills for consumers and that could mean higher inflation. The markets liked what they heard and the pound soared by 1.5% on Monday. Still, the soft economic outlook and the political chaos which has rocked the UK are strong headwinds which will likely send the pound lower.

    The UK releases for September on Wednesday, which is expected to edge higher. Headline inflation is projected to hit 10.0%, up from 9.9%, and core CPI is forecast to rise to 6.4%, up from 6.3%. With no sign of inflation peaking, the Bank of England remains under pressure to continue raising interest rates at the November 3rd meeting. Goldman Sachs has downgraded its UK growth outlook, with the economy expected to decline by 1% in 2023, worse than the previous estimate of -0.4%.

    GBP/USD Technical

    GBP/USD faces resistance at 1.1373 and 1.1455
    There is support at 1.1214 and 1.1085

    GBP/USD Daily Chart

    Originally Published Here -Source link

    0 0 votes
    Article Rating

    Homebuilder sentiment drops to half of what it was six months ago

    Previous article

    Russian rouble steady as exporters convert foreign currency By Reuters

    Next article

    You may also like

    Notify of
    Inline Feedbacks
    View all comments